New York City hospitals go their own IT ways

An IT unit that serves three different hospitals in New York will be dismantled so that each hospital can set its own IT course and direction.

Mount Sinai Hospital, New York University (NYU) Medical Center and NYU Downtown Hospital decided they each need an independent IT department because they have requirements and plans that are too different.

“The [different] demands placed on the IT department by the hospitals were pulling the IT leadership in different directions and creating problems for both the hospitals and the IT department,” said Richard Donoghue, senior vice president for strategy and business development at NYU Medical Center.

The idea for a consolidated IT department emerged in 1998 when the previously separate Mount Sinai and NYU hospitals were joined under the non-profit tax-exempt Mount Sinai NYU Health holding company. The goal back then was to take advantage of economies of scale by having a single IT department serve the company’s hospitals. The IT consolidation happened over the next several years.

Now the consolidation process is getting rolled back, but with a twist. Instead of setting up full-fledged IT departments, the hospitals agreed in February they wanted to farm out their IT infrastructure to an outsourcer, Donoghue said. About two weeks ago, each hospital signed an outsourcing contract with IBM.

“We’re basically facilitating a restructuring and separation of their IT infrastructure,” said Dave Liederbach, vice president of the healthcare industry practice at IBM’s Global Services unit.

“IBM is in a great position to treat these three clients in a unique way, thanks to our technology expertise and bandwidth,” he added.

Although each contract is different, they share a very important common element: the creation of a disaster recovery infrastructure. Currently, the three hospitals share a data center in a Mount Sinai location in upper Manhattan, after the Sept. 11 terrorist attacks destroyed the NYU Medical Center data center, which was located near the World Trade Center.

The contracts call for IBM to move that data center out of Manhattan and to build a back-up data center also out of Manhattan, at IBM sites in Staten Island and Rochester, New York, IBM’s Liederbach said. IBM should deliver this by January 2005, NYU’s Donoghue said.

It took the NYU Medical Center three days to restore its critical IT systems after the terrorist attacks, something the hospital deemed inadequate, so the IBM contract stipulates the disaster recovery system must cut that down to 12 hours, Donoghue said. “This is a very significant objective of ours,” he said.

The three contracts, which have a total combined value of $380 million and kick in on July 1, call for the following:

— Mount Sinai is handing over its entire IT infrastructure to IBM, including application management and development, mainframe and distributed systems, help desk and desktop support and networking and telecommunications, said IBM’s Liederbach. A small internal IT staff will manage the outsourcing relationship, he said. The contract is for 10 years.

— NYU Medical Center is handing over everything except for telephony and application development and management, NYU’s Donoghue said. The contract is also for 10 years.

— NYU Downtown Hospital has a similar arrangement as NYU Medical Center, except that its contract is for two years, with options for extending it, IBM’s Liederbach said.

Of the approximately 500 IT staffers in the soon-to-be-dismantled IT department at Mount Sinai NYU Health, about 340 will be transferred over to IBM, while others will become IT staffers at the hospitals themselves, Donoghue said.

Another common element in the contracts is that the hospitals will collaborate with IBM on research about the intersection of IT and the life sciences to develop computer technology that can aid in medical care, IBM’s Liederbach said.

The hospitals expect IBM to split the common IT infrastructure into three entities by mid-2005, providing each hospital total IT independence as they move in separate IT directions, NYU’s Donoghue said.

The NYU Medical Center is eager to continue deploying its own distinct IT development plan at its own pace and according to its own priorities, without having to coordinate with Mount Sinai, which has its own different strategy, needs and requirements, Donoghue said.

A major IT project at the NYU Medical Center is the creation of an electronic repository of medical-records data that will be available to doctors, nurses, pharmacists and other hospital staff, he said. “We want to transform the way we practice medicine,” and a key to that is the electronic availability of data for staff, he said.

NYU Medical Center also wants to independently monitor and improve the dependability of its IT systems with metrics that are more advanced than are available to it today, he said. Each hospital also wants to set its own strategy for meeting Health Insurance Portability and Accountability Act of 1996 (HIPAA) requirements, he said.

Mount Sinai Hospital, founded in 1852, has 1,171 beds. Last year it treated more than 48,000 people as inpatients and more than 84,000 in its emergency room, and received almost 490,000 outpatient visits. NYU Medical Center admits about 35,000 patients every year. NYU Downtown Hospital has 176 beds.